While they seem to have picked a rather inauspicious year to move to the now very wet city of Boulder, Zayo has finally turned in another quarter of steady growth. EBITDA margins were down sequentially, but this was due to a one time hit from lease termination charges that derive from all the integration work. Here’s a quick summary of Zayo’s numbers for their Fiscal Q4:
|$ in millions||Fiscal
|- Zayo Bandwidth||76.4||152.1||158.7||167.6||171.4|
|- Zayo Fiber Solutions||22.7||65.9||71.5||74.9||77.1|
|Adj. EBITDA Margin||52.4%||53.4%||56.4%||58.1%||54.9%|
Zayo has now split out Zayo Bandwidth into its component services, e.g. Ethernet, IP, Wavelength, SONET, Mobile infrastructure. I’m still lumping together that information for brevity for the moment, you can find the details in the company’s earnings supplement, which I am still reading through. Without the lease terminations, EBITDA margins would have kept marching upward past 59%.
Zayo added almost 500 on-net buildings during the quarter, and boosted capex above $100M for the first time. The latter isn’t too suprising, as they have been quite busy rolling out 100G and expanding organically into several new markets.
Zayo also bought Core NAP during the quarter, and has since agreed to buy Access Communications up in Minneapolis. The multiple for the latter was given as 11.7xEBITDA, with annual revenues of $5.5M. However, as M&A activity goes it’s been a quiet year so far for Zayo in the wake of last year’s shopping binge.